Australian dollar down ahead of RBA interest rate decision.
The Australian dollar is down ahead of today's interest rate decision by the Reserve Bank of Australia (RBA). And concern is growing that May's announcement will have further effects on the Australian currency.
While the RBA's monthly decision usually grabs the attention of mortgage holders, speculation that any interest rate cuts this year will kick start a devaluation of the Australian dollar, means that the RBA's decision has now grabbed the attention of Australian businesses with interests overseas and even those planning to purchase their travel money ahead of an overseas trip.
There is no clear sign of what the RBA's decision will be today. Thirteen economists surveyed by the AAP last week said that they expect the RBA to keep the cash rate unchanged at 3 percent. But according to BK Asset Management managing director Kathy Lien, the market was betting a 55 percent chance of a rate cut today, reports the News Limited Network.
While one economist has speculated the extreme view that the Australian dollar will fall as much as 40 percent against the US dollar over the next 18 months. According to Ms Lien a rate cut today would likely push the Australian dollar below 1.02 US cents but traders will be paying close attention to the Reserve Bank's accompanying statement.
"Whether the AUD (Australian Dollar) holds above 1.02 or drops to fresh two-month lows will hinge upon the tone and action of the RBA," she said.
The Australian dollar had dropped to 102.54 US cents this morning down from 102.72 US cents on Monday afternoon.
Those concerned for the Australian dollar can keep their eye on the exchange rates. While those planning to head abroad should check Mozo to find the best deals and exchange rates for their pre paid travel money.
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